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Introduction to Marketing Marketing concept and

business orientation

Geoff Leese Dec 2001 revised Sept 2002, August

2003, November 2008, January 2010

(special thanks to Geoff Leese)

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Content The marketing concept Micro & Macro environments Marketing research Buying behaviour Segmentation Product/service, Price, Place,

Promotion Marketing planning

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The marketing concept

What marketing isn’t Presentation & image - “spin” Glossy brochures & expensive

advertising Persuasive selling methods Excessive/wasteful packaging

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What is marketing?“The aim of marketing is to make selling superfluous. The aim is to know and understand the customer so well that the product/service provided fits him/her and sells itself.

Drucker.

“…..a social & managerial process by which individuals & organisations obtain what they need and want through creating and exchanging products and value with others

Kotler“The management process responsible for identifying, anticipating and satisfying customer requirements profitably.”

CIM

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Marketing concepts (1) Target markets

All different Classification using criteria

Customer needs Real needs Stated needs Unstated needs (assumptions) Delight needs Secret needs

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Marketing concepts (2) Co-ordinated marketing

all functions working together marketing throughout the organisation marketing management

Profitability long term success through customer

satisfaction– Employee performance– Customer satisfaction– profitability

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Business orientations (1)

Production orientation Affordable available products Prioritise production &

distribution efficiency Price sensitivity? Until 1950s

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Business orientations (2)

Sales orientation Selling lines that are produced Customers encouraged to buy Personal selling/persuasive

advertising 1950s and 1960s

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Business orientations (3)

Product orientation Excellent, well designed products Mass market appeal leads to

production orientation Fall in demand leads to sales

orientation Until 1960s

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Business orientations (4)

Marketing orientation Customer needs are focus of firm “Find a need and fill it” Flexible production/distribution

methods Organisational philosophy Profitability rather than sales

volume 1970s onwards

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Business orientations (5)

Relationship marketing Building long term relationships

between suppliers & customers Ensuring that interaction is a

pleasurable experience Customer service and attention

focused Loyalty cards 1980s onwards

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Business orientations (6)

Societal marketing Ethics driven Considers needs of society as a

whole Government pressure Pressure groups 1990s onwards

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Marketing as an interface

Need to consider Future customer needs Competition Relationships External environment

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Marketing management’s responsibilities

To identify customer needs To meet them using the

“marketing mix” Product/Price/Place/Promotion Physical evidence Process People

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Strategic vision

Look to the future Make well informed decisions Marketing myopia

Organisation describes itself in PRODUCT rather MARKET terms

Making slide rules? Creating a competitive edge Look at the “mission statement”!

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Market segmentation

Categorising overall market for products or services

Consumer market segments Industrial/commercial market

segments HOW do we categorise? WHAT are the key features of

the segments?

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Consumer markets (1) Demographic variables

Age Sex Family size Stage in family life cycle (DINKY, SAGA) Social class (A, B, C1, C2, D, E) Weight and size Income etc!

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Consumer markets (2) Geodemographic

Residential neighbourhoods ACORN (Groups & types - see L &

M) Pan-European (Hot chocolate -

see B & P!)– Moderns, go-betweens, traditionals

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Consumer markets (3)

Psychographic Activities Interests Attitudes, beliefs & opinions Education (Terminal Education

Age?)

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Consumer markets (4) Behaviour segmentation

Benefit sought (see MARVEL example in L&M)

End use (Soup?) Loyalty status (Hard-core, soft-core,

shifters, switchers) Usage rate Attitude Buyer readiness (Awareness, Interest,

Desire, Action)

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Consumer markets (5)

Geographical Religious Cultural

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McCarthy’s four P’s

Product Price Place Promotion Marketing planning needs to

integrate ALL these!

McCarthy E. J., “Organisation for new product development?” in: Product Strategy & Management (Libery & Stuchman eds.) 1963

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Marketing planning

Analyse the environment Consider capabilities Decide on target markets Adapt marketing mix Meet customer needs Gain competitive advantage

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Planning stages Where are we now? How did we get there? Where are we going? Where would we like to be? How might we get there? Choose a way? What will it be like? Will it be worth it? How will we know when we’re there? Are we on course?

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Marketing Audit

Monitors internal & external environment

First three stages of planning

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External Audit checklist Macroenvironment

Social, Technological, Economic, Political,Legal, Physical

The market size, customers (who, when, what, why, how,

where) image, market segments, distribution Competitors

Who are they? Objectives? Strengths & weaknesses? Market share? Size? Entry barriers?

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Internal audit checklist Sales, market share, profit margins,

costs Analysis of competitive position,

portfolio analysis Effectiveness of existing marketing mix Internal structures

organisation, communications, training Marketing information, control and

planning systems

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SWOT analysis

Evaluates strategic position of the business Strengths (MATCH to opportunities) Weaknesses (turn into strengths?) Opportunities Threats (minimise or turn into

opportunities) RELATIVE to competitors!

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Setting marketing objectives Provide direction - WHAT are we

trying to achieve? Set in terms of products

Development of new or related Or markets

Penetration of existing, new/related markets

Or both Diversification/divestment/realignment

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Marketing strategy

HOW objectives will be achieved Which target markets to

enter/develop How will competitors be targeted? Competitive advantage?

– Better, faster, closer….

Product development

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Tutorial task Look at your own organisation. What business orientation do you think it

has? What evidence is there of this? Tell us about your mission statement Tell us about your product/service Tell us about your customer focus Be prepared to discuss your answers next

week.

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Further reading

Brassington F & Pettitt S (2003), Essentials of Marketing, Pearson education Chapters 1, 5, 7-19 and 21

CIM website http://www.cim.co.uk/home.aspx

Marketing law website http://www.marketinglaw.co.uk/